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The Irish conundrum exposes the harsh realities of Brexit

On Monday 4 December 2017, we reached what may prove to be a key staging post on the long, and winding, road which may or may not be leading us towards Brexit. Progress to phase 2 of the withdrawal negotiations, in which the UK and EU will be able to begin to discuss their future relationship, is, as stipulated by the EU and agreed by the UK Government, dependent on ‘sufficient progress’ in relation to the divorce bill, citizens’ rights, and Ireland. The clock towards March 2019 is ticking.

By Monday morning, it appeared that a methodology for calculating the divorce bill had been agreed, and that sufficient guarantees relating to the protection of citizens’ rights had been offered (though it should be noted that various difficult issues, including in relation to the future role of the CJEU, appear to have been left to phase 2). It was also reported that an agreement had been reached that there was ‘to be no divergence from those rules of the internal market and the customs union, which now or in the future, support North South cooperation and the future of the Good Friday Agreement’, a form of words which appears to have been agreed in Brussels, Dublin and London. Reading that, it is not clear whether the leaked agreement contemplated harmonisation between the EU (including Ireland) and Northern Ireland specifically; or between the EU (including Ireland) and the UK as a whole.

Enter the DUP. Arlene Foster made it clear that the DUP would not accept ‘any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom’. Suddenly, the deal was off. Had the UK been agreeing to a lack of divergence between Ireland and the UK as a whole, the DUP’s concern would not have resonated. It is only possible to conclude that, in order to allow the withdrawal negotiations to move forward, the UK Government was contemplating a regime in which divergence within the island of Ireland was to be managed, while the rest of the UK retained the freedom to distance itself more sharply from EU (including Irish) rules. A chorus of voices, from Scotland, Wales and London (and also, I believe, Grimsby), predictably rose to demand an equivalent right to similar special treatment, seeking to protect their own special relationships with the EU. We wait to see how the Government will react.

This short contribution aims to illustrate that there are now hard questions for the Government to confront. If Ireland is in the single market and customs union and Northern Ireland is not, there will need to be a border on the island of Ireland, and, as Anand Menon wrote yesterday, any increase in regulatory divergence in Ireland would impact significantly on people’s lives there (he references health care, agriculture, transport, and energy). If the island of Ireland is to remain in the single market and customs union (or, and I will come back to this shortly, be the subject of an equivalent arrangement ensuring continued regulatory alignment) and the rest of the UK is not, there will need to be a border across the Irish Sea.

The simple solution would be for the UK as a whole to remain within the single market and customs union (or be the subject of an equivalent arrangement ensuring continued regulatory alignment), but here we run into the politics. Leaving the single market and customs union is one of the UK Government’s (self-imposed) red lines, and it is unlikely that PM Theresa May would, as things stand, be able to cross that line, and at the same time keep her Government together. (Whether there is popular support for such a change in the Government’s position is an altogether different question – on which I will not speculate. Yesterday’s urgent question in the House of Commons seems to set the stage for renewed political debate in relation to continuing single market and customs union membership for the UK as a whole.)

The European Union and the United Kingdom

It is useful to spend some time reflecting on the extent to which the European Union and the United Kingdom allow (perhaps tolerate, perhaps celebrate) regulatory divergence. First, the EU. I am at pains to keep this paragraph free of legal jargon; and apologise if, as a consequence, it is over-simplified. The key rules are those which affect the operation of the customs union and the single market. Let me start with the internal dimension – the single market. Within the single market there are some harmonised standards, and complex arrangements for the making and enforcement of those standards. Via the principle of mutual recognition trade occurs freely within the EU in many sectors in which product standards are not aligned. The role the Commission and Court (and a number of EU agencies), in making, monitoring, and enforcing single market rules, is fundamental. Given the extent of free movement within the single market, external borders assume a great significance. Hence the customs union: which involves a clear commitment on the part of every state to collect tariffs, and to ensure that all products entering the EU comply, as necessary, with regulatory standards. The EU institutions are at pains to ensure that there are no areas of weakness on the EU’s external border. (The situation as regards the free movement of persons is different, mainly as a result of the fact that the EU does not have a common immigration regime. The contrast between goods and services on the one hand, and people on the other, is discussed here, by Michael Dougan.)

Second, one should reflect on the devolution settlement in the UK. Devolution is not my area of expertise; suffice it to say that different systems have been set up, granting Scotland, Wales and Northern Ireland the freedom to create their own laws and standards in a range of areas (including in relation to abortion and marriage). The details of the devolution settlement are contested, and, in some respects, not particularly coherent. The key point is that to the extent that regulatory differentiation is permitted, it occurs within a framework established by law. That law is established by the Westminster Parliament, and, crucially, as things now stand, it includes the requirement that the devolved assemblies comply with EU law. (To put this in terms more familiar to EU lawyers, domestic constitutional arrangements, such as devolution, do not affect a Member State’s obligation to comply with EU law.)

I am tempted to explore the differentiated legal landscape of the European Union and the United Kingdom in more detail – and to reflect on the challenges it creates for policy-makers at all levels – but will leave that for another day. For now it is important to focus on implications for Brexit, and on the implications for the resolution of the Irish conundrum.

No easy resolution to the Irish conundrum

Is it possible to find a solution in which the UK leaves the single market and customs union, and there is no border either on the island of Ireland, or in the Irish Sea? The answer is an unequivocal no. The only arguments which even begin to look plausible are based on misunderstandings concerning the way in which the EU operates, or what look certain to be vain hopes that the integrity of the EU market is something which the EU will be willing to negotiate away. If the UK (with or without Northern Ireland) leaves the customs union, the EU’s external border will fall either across Ireland, or across the Irish Sea; and it will need to be policed. If UK goods do not comply with EU standards, they will not be granted free access to EU markets. If institutional arrangements for ensuring compliance with EU standards within the UK do not exist, UK goods will not be granted free access. Unless adequate arrangements exist for the enforcement of internal market rules (and that means UK acceptance of a role for the Commission and the Court), UK goods and services will, once again, not be granted free access.

The EU has been abundantly clear that it is not prepared to compromise on the integrity of the single market. I have little doubt that much ink will be split trying to find ‘solutions’, which serve to ensure that there is sufficient alignment between Northern Ireland and the Republic, or, more broadly, between the UK and the EU, but which stop short of membership of the single market and customs union. It may well be possible to postpone some hard choices til phase 2 of the negotiations. But, ultimately, the EU will insist that any arrangements devised by the UK are robust, enduring, and subject to effective enforcement mechanisms (see also Chris Grey’s analysis, here).

The trade agreements which the EU has reached with other countries all involve reciprocal understandings on standards, institutions, and enforcement. Only in the case of the EEA agreement – which involves wholesale acceptance of the EU law acquis, a considerable contribution to the EU budget, and a role for bodies which exactly mirror the Commission and the Court of Justice – is it possible to dispense with the need for border controls. The price for market access is not complete regulatory alignment, but it is compliance with substantive EU standards where they exist, together with acceptance of the EU’s rules on the enforcement of such standards. It is, to put this another way, not so much about the extent to which the rules of the various member states may converge, but more about the fact that states participate in a legal structure within which there is confidence that common standards are monitored and enforced, and external borders are controlled.

There is no way to avoid a border, either across Ireland or in the Irish Sea, unless the UK is prepared to be part of the single market and customs union. If the UK, in addition, wants to have its say on the making of EU rules (and I add this only lest I be taken to be advocating the EEA solution) it should remain in the EU. The choices are stark, and raise enormous political questions for the Cabinet and Government as whole. The DUP (whose concerns about a border in the Irish Sea are shared by many) may, paradoxically, have done us all a favour. In forcing Theresa May to confront the contradictions in her approach, they have challenged her to set out her vision for Brexit. She can, essentially, either opt for borders, or agree to regulatory convergence (in relation to rules, standards and enforcement mechanisms) which renders borders unnecessary. It will be interesting, in the days and weeks ahead, to see what her vision is; and how much support that vision enjoys.